Millions of dollars poured into emerging artificial intelligence (AI)-based startups has created a venture capital bubble for the segment, said Jim Goodnight, chief executive of data analytics firm SAS.
“There is a lot of hype about AI in venture capital. Anyone who says they use AI, get millions of dollars (in funding). So, much of what has been sold to venture capital, is just ideas of where it could be used. (We are) yet to see a major breakthrough," Goodnight said in an interview.
“I think there is a bubble. There is so much hype that AI is going to take over the world and that we are going to be slaves to what the computers tell you to do. I don’t see that at all, from an insider perspective," he added.
AI and deep technology startups have seen strong funding interest in both India and the US. AI startups in the US raised $12 billion in the first three quarters of this year alone, up from $10.2 billion in 2018, showed data from CB Insights, a market intelligence platform.
The sector also saw a billion dollar funding round last quarter, when computer hardware and services provider Open.ai raised the money from Microsoft in July.
“AI is good for building models and they are only slightly better than other models. Machines cannot think," Goodnight said.
“Machine learning is the biggest misnomer in the world. We start out by estimating all the parameters in the model. The derivatives help change the parameters of the model. The machine is not learning. We are just optimizing the model."
With revenues of more than $3 billion, SAS has customers in more than 100 countries, who use its suite of data analytics products to make better business decisions.
Last December, Mint had reported that deals in deep-tech startups, such as those driven by AI, machine learning and robotics, had touched an all-time high of $247.78 million in 2018, more than twice the $96.8 million in 2017.
Goodnight said SAS sees an opportunity in vision- and text-based startups in the AI domain. “Whatever the human eye can see and perceive, we can enable a machine to see and interpret the same. Even eye care and healthcare startups have a good opportunity."
The writer is in Milan at the invitation of SAS Analytics.